Feb.13 - Renault says it's extending its turnaround plan by a year but lifting its targets, and there's talk Peugeot has secured a vital four billion euro cash injection. David Pollard reports.
It's been a rocky road for French carmakers. They're hoping a smoother one might be ahead. Renault is promising positive cash-flow this year. And there's talk that Peugeot has secured a deal for a massive cash injection. Though existing shareholders weren't too pleased: shares were down around five percent in early trade on the prospect of a dilution to their holdings. It's thought Chinese carmaker Dongfeng and the French government will each take 14 per cent stake in Peugeot at a heavily discounted price of 7 and half euros. An agreement, say sources, will go to the Peugeot board on February 18th, capping several months of talks over a rescue plan. One potential obstacle remains: the choice of a new independent chairman. The French government is pushing one of its senior civil servants, Louis Gallois. Dongfeng's preference is prominent businesswoman Patricia Barbizet, seen here in the middle. For Renault-Nissan, chief exec Carlos Ghosn has unveiled a set of what he calls ''ambitious yet realistic goals''. Positive cash flow this year, and by 2017 revenue up by a quarter, profit margin at five per cent. Its annual results were mixed: net income is down two-thirds to just under 600 million euros on around half a billion euros of writedowns. It's fallen short of sales targets and is extending its turnaround plan by another year. But a recent increase in operating margin and Ghosn's pledges helped shares to a four per cent bounce.